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What are Tell-Tale Signs of Lifestyle Creep…

Lifestyle creep is one of the biggest (and probably the most overlooked) obstacle to getting ahead financially. It keeps a lot of people stuck, it contributes to debt, and it’s why some people live above their means.

If you’re not familiar with this term, lifestyle creep (also known as lifestyle inflation) is “increasing your standard of living every time your income increases.” However, before we go any further, earning more money does not mean that you can’t improve your life or satisfy wants. So there’s nothing wrong with moving into a home with more space or buying a new car.

But if your level of spending “always” increases as your income does, and you’re “always” buying stuff just because you can, you might be a victim of lifestyle creep. 

The most obvious sign is constantly upgrading your house, or your car, or getting into more credit card debt.

But lifestyle creep isn’t always obvious…it can be subtle too. Here’s a look at a few sneaky ways it can creep into your life.

1. You stop looking for deals

When you’re living paycheck to paycheck, looking for bargains and waiting for sales is a priority. You don’t have much money, so you have to stretch your pennies to meet your needs. In which case, you might think twice about paying full price for things, and you comparison shop to make sure you’re getting the best price.

However, as your income increases you might stop clipping coupons and start ignoring generic brands. Additionally, you might stop waiting for sales and start paying full price for clothes. 

Now, I’m not saying that your spending habits should remain exactly the same after making more money – realistically a few things might change. Even so, from time to time you should compare your new spending habits with your old to assess whether they’ve changed a little or a lot.

Even though you don’t have to be “so deal conscious about every purchase,” you shouldn’t toss bargain shopping completely out the window or else you’ll end up spending more on just about everything.

2. You’re going out more often (and to better places)

Personally, I love new experiences. And one benefit of earning more is the ability to try new things. Whether it’s going to different restaurants, the theater, or traveling, I always preach experiences over things.

But even though I feel this way, lifestyle inflation can also creep into your life this way. So be careful and monitor how you spend in these areas.

Maybe you used to only eat out two or three times a month, but now you’re eating out ten times a month. And not only are you eating out more, you’re going to much nicer restaurants and spending an extra $10 or $15 per visit.

Instead of eating out so frequently, cap it somewhere in the middle and limit restaurant trips to a few times a month and use the extra money to boost your savings and hit other goals. 

3. You’re spending more on self-care

I also believe that self-care is important…and sometimes this involves money.

When you didn’t earn as much, maybe you weren’t in a position to schedule salon appointments, nail appointments, or massages. So once your income increases you might have the urge to make up for the past. 

Understand, it’s not so much the act of spending on self-care that’s dangerous – it’s how much more you’re spending and the frequency of these appointments that gets you into trouble.

To illustrate, let’s say you’re living paycheck to paycheck and you get a $5,000 a year raise. That’s an extra $400 a month before taxes (about $300 after taxes). However, it only takes spending an extra $75 a week on “wants” to eat through the money.

Keep in mind that spending more on self-care isn’t only about mind and body. It also includes spending an excessive amount on hobbies.

4. Spending more than peers with a similar income

Granted, we don’t always have inside information about another person’s bank account or bills, and so much plays into what a person can afford.

Even so, you might have a general idea of where your friends stand financially (sometimes you can gauge this through conversations). So if you earn roughly the same as your friends and you have very similar financial circumstances – yet you’re spending WAY MORE compared to them – you might be a victim of lifestyle creep.

You might travel considerably more, eat out more, and buy new clothes more often. If so, it doesn’t hurt to take an honest look at your situation to see whether lifestyle creep is an issue, especially if you’re not saving money and you’re increasing your debt.  

Your friends might spend less because they’re spending within or below their means, whereas your spending outpaces your income.

5. You’re paying more for conveniences

There’s nothing wrong with occasionally paying for something that makes your life easier, and it’s even okay to enjoy regular conveniences. But you have to consider how much you’re paying for these and add up the cost because convenience aren’t cheap.

One tell-tale sign of lifestyle creep is spending way more in this area. So instead of going to the grocery store to pick up a few items (because it’s cheaper), you’ll now go to the corner pharmacy because it’s closer (even though you’ll probably spend more).

Or, instead of picking up your takeout order, you’re suddenly okay with paying an extra $5 in delivery fees.

And yes, time can be more valuable than money. However, you have to strike a balance. The truth is, throwing money at every single inconvenience comes with a hefty price tag. 

6. You stop budgeting

I feel this is one of the biggest signs of lifestyle creep, and I’ve had people admit that they stopped paying attention to their budget after their income increased. Once they no longer had an income problem budgeting no longer seemed necessary.

But in a lot of cases, these people unknowingly traded an income problem for a spending problem. Once they stopped tracking their purchases, they started overspending in just about every category. 

I’ve said this before: Budgets aren’t only for specific people because everyone has the potential to overspend. And honestly, I think the potential is greater the more you earn. So it doesn’t matter if your income increases by $5,000, $10,000, or $20,000, always know where your money goes and create a spending plan to ensure that you’re spending a reasonable amount on wants. 

Did I miss anything?!? What are other subtle, often overlooked signs of lifestyle creep???